Fixing the Mortgage Giants Remains the Largest Single Piece of Unfinished Business From the Financial Crisis

WASHINGTON—Of all the temporary patches the U.S. government slapped onto the sinking financial system in September 2008—from pumping money into banks to rescuing insurer American International Group Inc.—none was more urgent to then-Treasury Secretary Henry Paulson than saving mortgage giants Fannie Mae and Freddie Mac.

"It was the single most important thing we did to prevent disaster—real disaster," said Mr. Paulson in a...